GLOBAL FORUM:Get advice and funding to turn a clever concept into a viable business
BRIDGING THE funding gap between early-stage investment and the involvement of venture capitalists is difficult – but it can be done, says Johan Gorecki, the founder and chief executive of Globe Forum, which is working to bring sustainable innovation to the market. Gorecki, who has an impressive entrepreneurial pedigree as one of the founders of Skype, describes the typical funding gap for entrepreneurs as “the valley of death”.
This happens when entrepreneurs have ploughed all of their personal funds and that of early-stage supporters, such as friends and family, into developing a concept. To take a venture to the next level often requires an injection of anywhere from €100,000 to €500,000 but venture capitalists are not interested because of the lack of scale.
This may not be a bad thing, says Gorecki. His advice to early stage entrepreneurs is to explore all possible funding options before getting into bed with venture capitalists. “The temptation is there when a funding solution is presented but many people end up giving away too much of their equity too quickly,” he says.
Having made his money with the sale of Skype to eBay for more than $4 billion (€2.8 billion) in 2005, Goreckis focus now is on helping innovators and entrepreneurs focused on sustainability to find partners and investors that will bring their ideas to life through the Globe Forum.
He points out that a number of funding models could be used by young businesses including a structured crowd-funding arrangement where potentially hundreds of individuals could invest between €1,000 and €25,000.
In relation to clean-tech projects, offsets could be channelled into entrepreneurial support. Direct Government grants or loans should also be sought to get projects through this difficult stage.
“It seems relatively easy to get Government funding for academic research, so it makes no sense not to support the output of that research when it is about to be commercialised. That strikes me as a waste,” he says.
Gorecki says he is also in favour of the introduction of loan guarantee schemes that exist in other countries, including the UK.
“Entrepreneurs with good ideas often work on a very small scale which hinders their development potential. What we do is to bring ideas and innovations to market in a much more structured way on a much larger scale,” he says.
Globe Forum, which runs conferences throughout Europe, is holding a two-day event in Dublin entitled Smarter and Greener – Innovation for a Sustainable Future next month as part of the Dublin Innovation Festival. It will bring together innovators, entrepreneurs, investors and multinational firms.
It is billed as a unique blend of conference sessions focused on developing market-leading innovation, while also acting as a place where innovators and investors can connect.
Specific challenges will be set before the event with the aim of finding solutions.
The forum will be more than just a talking shop and there will be a strong focus on output, Gorecki says. A marketplace will actively encourage investment in emerging enterprises, providing professional support for innovators, and encouraging new methods of funding innovation.
The aim is to initiate 30 to 40 funded innovation projects directly out of the event and to identify at least 10 “big idea” challenges with significant potential, he says.
One of the most exciting aspects of the event will be the “elevator pitches” that will allow innovators to showcase their ideas to potential collaborators and investors in just a few minutes, he says. “One of the weaknesses of innovators is their ability to sell so we will be working with those presenting to improve their skills in this area as this will represent a massive opportunity for them,” he says.
A select group of innovators will be invited to pitch to a panel of investors, with the overall winner receiving a valuable mentorship programme to guide them to secure investment.
Gorecki, who is from Sweden, is refreshingly upbeat about Ireland and Dublin in particular, describing the city as a test bed for ideas and a place where products and services can rapidly become internationally viable businesses. “Collaboration between the research community, the Government and industry is very close here. You have a greenhouse for innovation and development,” he says.
The forum will showcase the best of current Irish research and innovation. Leaders from the Government, business, research communities and education will take part including former President of Ireland Mary Robinson as well as leading members of the Irish diaspora.
Representatives from cities from around the world will discuss how they solved challenges in such areas as transport and health.
* Globe Forum is at the Convention Centre, Dublin, November 17th-18th; globeforum.com
